Thursday, October 24, 2002

More fun with Republican accounting: Doug Forrester, their Senate
candidate in New Jersey, won the primary by scaring off other
candidates with the war chest he supposedly had earned from his
privately held company, which he
valued at $100 million, even though it has a profit margin of
under ten percent on revenues estimated at $13 million. (The usual
rule of thumb is to value a company at roughly ten times earnings;
even if the revenue estimate is low, that would yield a value well
under $20 million, and perhaps under ten).

How was that justified?

"P.B.M.'s are a high-growth industry," Mr. Forrester
said. "Look at the course of the valuation of Amazon dot-com
stock. Their worth was remarkable, but their earnings were negative."

This logic comes from the same party which insists that the Bush
tax cuts don't have anything to do with the burgeoning budget deficit,
which is entirely the fault of Osama bin Laden. But in this case,
they're apparently getting what they voted for --- imaginary money
won't pay for real ads, and Republican party faithful, having heard
all about Forrester's fools' gold, are somehow reluctant to supply the
more tangible variety.